EU trade commissioner Peter Mandelson is right that foreign investment has the potential to help reduce poverty in sub-Saharan Africa (Letters, October 19). But the idea that fewer restrictions on the activities of foreign investors will automatically benefit poor people is wrong.

The North American free trade agreement offers a chilling example of what happens when foreign companies are given too much power. In 1997 a Mexican municipality had to pay the US firm Metaclad $15.6m in compensation after it had refused to allow the company to build a toxic waste dump in a special ecological zone.

It seems strange that the European commission appears to be promoting similar outdated investment agreements for Africa just as its member states, such as the UK, are beginning to tackle reckless corporate behaviour. The passage of the current companies bill into law will require UK plc to behave more responsibly overseas; the commission should scrap plans for investment clauses in its economic partnership agreements to ensure the rest of the EU follows suit. Tom Sharman Trade analyst, ActionAid

However, sub-Saharan Africa as a region does not do that badly, given its small market. It does not do worse than other regions when foreign direct investment (FDI) is measured against total investment or income. Further, the volume of FDI is not sufficient to guarantee development; the type of investment, and host-country economic conditions, institutions and policies are key factors.

As is the issue of investment rules, which have so far been the preserve of member states, not the European commission. Mandelson criticises Britain for adding "its voice to those who keep Africa's door closed" to investment. In fact, the UK government, which has signed investment treaties with most African countries, wrote to Mr Mandelson on October 13 urging him not to "oblige African, Caribbean and Pacific countries to negotiate rules on investment, competition and government procurement, unless they specifically request it" - a suitably open-minded approach to development politics.

EU businesses have so far remained uninterested in EPAs, while African countries generally regard negotiations on transparent investment rules in EPAs as less than urgent. Dirk Willem te VeldeAdrian Hewitt Overseas Development Institute, London

The government's decision to "break ranks" with the EU is welcome (Britain urges EU to change stance on free trade talks, October 16). Billie Miller, chair of the ACP ministerial trade committee, has given warning the EPAs lack balance and the EU must not expect reciprocal arrangements on market access. The ACP increasingly feels no deal is better than a bad deal.

The direction the negotiations are taking needs to be reassessed. The promise to build economic capacity in ACP countries has not included any new money - it will come from development funds already allocated to them. The EU budget for the next seven years has been set and pledges of money to support the promised aid for trade are absent.

The commission has said repeatedly EPAs are instruments for development and not just tools for opening markets. An effective funding mechanism for their implementation must be created. Glenys Kinnock MEP Labour, Wales

Mandelson cloaks himself in the language of development, but is actually proposing new, corporate-driven investment rules that would reverse development and cause lasting damage to the environment. Oil, gas, fisheries and mining would be opened up and deregulated to pave the way for European corporations' access to natural resources - which has already damaged African communities and their environment, from Shell's operations in the Niger Delta, to mining operations in Zambia, and fish trawling off the coast of west Africa. Mandelson must be forced to start listening to the demands of the poor. Joe Zacune Friends of the Earth